P.A. Effort Targets Products Made in the Settlements

The Palestinian Authority has begun a campaign to stop, by year’s end, the Palestinians’ widespread practice of buying wine, chocolates, fruits and other items produced in the Jewish settlements.

From a political standpoint, Palestinians have condemned Israeli settlements in the West Bank throughout their four decades of existence. But from an economic viewpoint, there has been significant mutual dependency.

An estimated 30,000 Palestinians work in the settlements, including many who are employed building settlers’ homes. And Palestinians in the Territories consume large quantities of goods produced in settlements in the West Bank and, to a much smaller extent, in Jewish communities in the Golan Heights.

The amount of goods involved has long been unclear, but in December the Palestinian minister of national economy, Hassan Abu-Libdeh, estimated that a half-billion dollars worth of settlement-produced goods are sold to Palestinians every year. He announced that his ministry expected to purge settlement goods from the Palestinian markets by the end of 2010. “Consuming settlements’ products is wrong nationally, economically, politically, and it must stop right away,” Abu-Libdeh told a news conference in Ramallah.

Products bearing Hebrew-language lettering are a common sight on the shelves in Palestinian stores, with many Israeli-produced goods offered for sale. The majority come from within Israel’s pre-1967 borders and are imported in line with the Paris Protocol of 1994, which codifies and ensures the existence of Israeli-Palestinian trade relations. Abu-Libdeh has said that he is not opposed to the sale of these goods.

However, he takes a different view toward products made in the settlements. This is why P.A. officials are searching for settlement goods that are on the Palestinian market or headed for it, and confiscating and destroying them. Officials have already seized products worth more than $1 million. It is unclear whether the confiscations will be followed by court proceedings.

Settlement goods generally reach the Palestinian market through Palestinian middlemen, who feed them into a Palestinian supply chain. Informed sources estimate that fewer than 100 middlemen handle most of the goods and take a 10% to 15% slice of the market value, each averaging a profit of about $750,000 a year.

They handle everything from toilet tissue to wine and chocolates, and the items are usually indistinguishable from goods made within Israel’s pre-1967 borders, because they all carry the “made in Israel” label. Palestinian businesses are expected to do their own research about the origins of goods, and many turn to lists compiled by the far-left Israeli organization Gush Shalom. Settlement goods “are embedded in our retail environment, and it takes real effort to have them removed,” said Sam Bahour, a prominent Palestinian entrepreneur and a member of the team that established the Palestinian territories’ first Western-style mall in 2003.

Until this point in the campaign, Palestinian officials have targeted shopkeepers and suppliers in raids designed to confiscate goods, but the P.A. is known to have its eyes on the key middlemen.

As a basis for its new campaign, the P.A. is invoking the authority of a 2005 decree instituted by the Palestinian Cabinet under Mazen Sinokrot, who was then minister of national economy. Sinokrot told the Forward that the decree was a political protest against the settlements’ existence. He said that industrial zones in the settlements are a symbol for Palestinians of inequality in the West Bank, as they have benefited from economic benefits and subsidies from the Israeli government.

The campaign also was enacted, he said, because of simple economics. “The shekels spent on settlement produce could be spent on Palestinian products,” he said, adding, “Imagine how many jobs this could create and how it could increase our GDP.”

But settler leaders question this logic. Dani Dayan, chairman of the settler umbrella body, the Council of Jewish Communities in Judea and Samaria, told the Forward, “The issue of the Palestinian Authority not buying goods produced in Judea and Samaria is quite absurd, because many of the employees are Palestinian, so it will hurt them economically more than it will hurt our market.”

Sinokrot said that enforcement of the decree had been delayed because when it was enacted, the P.A. was preoccupied with the Israeli disengagement from Gaza. Some members of the Palestinian business community suggest another reason for the decision to apply the decree now — a desire to iron out the anomaly of Palestinian supporters elsewhere stepping up campaigns to boycott settlement goods while in the Palestinian territories, settlement goods are consumed freely.

“It was ironic and odd that action against settlement produce has been increasing abroad but not among Palestinians,” said Maher Hamdan, CEO of the Palestine Trade Center, an organization dedicated to growing the Palestinian economy.

The Israeli Ministry of Industry, Trade and Labor declined to comment on the P.A.’s campaign.

Some members of the Israeli left have been boycotting settlement goods for years, and there are boycott movements in Europe and the United States. In December, Britain sparked controversy by advising supermarkets to make it clear when produce they were selling was grown in the settlements. The British government declared that it “considers that traders would be misleading consumers, and would therefore almost be certainly committing an offense” if produce from the “Occupied Palestinian Territories” were labeled Israeli. Israel condemned the move as tacit encouragement for boycotts. Hamdan said that such moves overseas act as a “trigger” for Palestinian efforts.

Alfred Tovias, director of Hebrew University’s Leonard Davis Institute for International Relations and an expert in Israeli-Palestinian trade links, shared Hamdan’s belief that enforcing the decree was a case of Palestinians following the lead of their sympathizers abroad. He also views it as a case of the P.A. laying down the terms for “economic peace” — the plan by Israeli Prime Minister Benjamin Netanyahu for Israel and the Palestinians to strengthen trade ties, whatever happens in progress towards a two-state solution. This is a case of the P.A. making its position on trade with Israel “more coherent” as Netanyahu promotes this idea.

Tovias predicted that the Palestinian boycott would have a negligible effect on the Israeli economy because only 5% to 10% of goods come from the West Bank. He said it could have a considerable effect on settlement economics — though Dayan said that settlers have plenty of other markets, so he is not concerned.